The major problems that have been identified are, poverty, illiteracy, unemployment, homelessness and crime and violence. Poverty is the condition, when the individuals experience scarcity of resources that are necessary to sustain their living conditions appropriately in my slide we can learn more about this
2. Rural Entrepreneurship
At present what is
needed is to create a situation
wherein the migration from rural areas
to urban areas comes down. Migration
per se is not always undesirable but it
should be minimum as far as
employment is concerned. Indeed the
situation should be such that people
should find it worthwhile to shift
themselves from towns and cities to
rural areas because of realization of
better amenities and opportunities
there.
In simple terms
“entrepreneurship” is the act of being
an entrepreneur, which can be defined
as “one who undertakes innovations,
finance and business acumen in an
effort to transform innovations into
economic goods”. The problem is
essentially lopsided development
which is a development of one area at
the cost of development of some other
place, with concomitant associated
problems of underdevelopment. For
instance, we have seen
underemployment or unemployment in
the villages that has led to major influx
of rural population to the cities. 2
3. Some of the basic principles
of entrepreneur which can be
applied to rural development
are:
⩥ Optimum and full utilization of local resources in an
entrepreneurial venture by rural population –Better
distributions of the farm produce results in rural
prosperity.
⩥ Entrepreneurial occupation opportunities for rural
population to reduce discrimination and also
providing alternative occupations as against the
rural migration
⩥ To activate such system as to provide basic „6M‟-
Manpower, money, materials, management,
machinery and market to rural population
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4. Major benefits from rural
entrepreneurship
⩥ 1. Provide
employment
opportunities: Rural
entrepreneurship as
such is mainly labor
intensive and certainly
provides a clear
solution to the growing
problem of
unemployment. Mainly
the development of
industrial units in rural
areas through rural
entrepreneurship has
high potential for
income creation and
employment
generation.
⩥ 2. Balanced regional
growth: Rural
entrepreneurship can
dispel the
concentration of major
industrial units in urban
areas and also
promote regional
development in a
balanced way
⩥ 3. Promotion of artistic
activities in rural areas:
The age-old rich
heritage of rural India
is preserved by
promoting and
protecting handicrafts
and arts through rural
entrepreneurship
⩥ 4. Check on migration
of rural population:
Rural entrepreneurship
can fill the lacunae and
big gap and also
disparities in income
for rural and urban
people. Rural
entrepreneurship will
bring in or develop
infrastructural facilities
like roads, power,
bridges etc. It can help
to check the migration
of people from rural to
semi urban and urban
areas in search of jobs.
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5. ⩥ 5. Check on social
evils existing in
society: The growth
of rural
entrepreneurship
can reduce social
evils like growth of
slums, poverty,
pollution in cities
etc
⩥ 6. Awaken the rural
youth: Rural
entrepreneurship
can awaken the
rural youth and
also expose them
to various avenues
to adopt
entrepreneurship
and promote it as a
career
⩥ 7. Improved
standard of living:
Rural
entrepreneurship
will also increase
the literacy rate of
rural population.
Their education
and self
employment will
also prosper the
community, thus
increasing their
standard of living.
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8. Some of the major financial problems faced by rural
entrepreneurs as follows
a. Paucity of funds:
Due to absence of tangible
security and credit in the market most of the
rural entrepreneurs fail to get external funds.
Also the procedure to avail the loan facility
from the banks is too time consuming that its
delay often disappoints the rural entrepreneurs.
Lack of finance available to rural entrepreneurs
is by far one of the biggest problems faced by
rural entrepreneurs nowadays especially due to
global recession. Some of the major difficulties
faced by rural entrepreneurs include low level
of purchasing power of rural consumer so
sales volume is insufficient, reduced profits due
to competition, lack of finance to start
business, pricing of goods and services.
Today financial statements are also
difficult to be maintained by rural entrepreneur due to
stringent tax laws, lack of guarantees for rising up of
loans, major difficulty in raising capital through
equity, dependence on small money lenders for
loans for each they charge discriminating interest
rates, huge rent and property cost. These all
problems create a difficulty in raising money through
loans.
The government has various
institutions for this purpose but certainly the results
are not up to the level expected. Industrial credit and
Investment Corporation of India (ICICI), Industrial
Finance Corporation of India (IFCI), and Small Scale
Industry Development Bank of India (SIDBI) are
some of the major national level (SFC) institutions
that are helping out rural entrepreneurs. Some State
level institutions are also working like State Financial
Corporation and State Industrial Development
Corporation (SIDC).
9. c. Rise Element:
Rural Entrepreneurs
have very less risk bearing
capacity due to lack of financial
resources and external support.
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b. Lack of Infrastructural facilities:
In spite of efforts made by
government the growth of rural
entrepreneurs is not very healthy
due to lack of proper and
adequate infrastructural facilities.
11. : Some of the major marketing problems faced by rural
entrepreneurs are as follows:
a. Competition :
Rural entrepreneurs face stiff
and severe competition from large sized
organizations and urban entrepreneurs. They
incur high cost of production due to high input
cost. Problem of standardization and
competition from large scale units are some of
the major problems faced by marketers. They
face the problem in fixing the standards and
then sticking to them. For the survival of new
ventures competition from large scale units
also creates difficulty. New ventures have
limited financial resources and hence cannot
afford to spend more on sales promotion and
advertising. These units are not having any
standard brand name under which they can
sell their products.
New ventures surely have to come
up with new advertisement strategies which the rural
people can easily understand. Literacy rate is one
among many major problems faced by rural
entrepreneurs and they should device strategies and
remedies to solve it. Also printed media has limited
scope and coverage in the rural context. Traditionally
bounded nature, cultural barriers and cultural
backwardness all add to the difficulty of
communication. It has been seen in the recent past
that in spite of enough food stocks with government
warehouses, people have died of starvation. This
indicates a major problem with the public distribution
system. The producers too are not collective in their
approach for marketing their products because they
are too widely scattered and uneducated
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12. b. Middlemen:
Middlemen exploit rural entrepreneurs. Rural entrepreneurs are heavily
dependent on middlemen for marketing of their products who necessarily pocket large
amount of profit. Poor means of transportation facilities and storage facilities are also
other marketing problems in rural areas. In most of the villages, farmers store the
produce in open space, in earthen vessels, in bags etc. So these indigenous and
traditional methods of storage are not capable of protecting the produce from weevils,
dampness etc. The agricultural goods are not standardized and graded.
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14. Some of the major management problems are
as follows:
a. Lack of Knowledge of I.T:
Information technology as such
is not very common in rural areas.
Entrepreneurs rely on internal
linkages that which encourage the
flow of services, goods, ideas and
information. The intensity of family
and personal relationships in rural
communities can sometimes be very
much helpful but they may also
present obstacles to effective and
efficient business relationships.
Business deals may receive less than
rigorous objectivity as well as
intercommunity rivalries may reduce
the scope for regional cooperation.
Lines of authority and
decision making process are mostly
blurred by local politics in rural areas.
b. Legal formalities:
In complying with various
legal formalities and in obtaining
licenses rural entrepreneurs find it
extremely difficult due to ignorance
and illiteracy. Also procurement of
raw materials is really a tough task for
many rural entrepreneurs. They may
also end up with poor quality raw
materials, which may also face the
problem of storage and warehousing.
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15. 15
c. Lack of technical knowledge:
Rural entrepreneurs to a major extent suffer a
severe problem of lack of technical knowledge. Lack of
training facilities and other extensive services create a
hurdle for the development of rural entrepreneurship.
d. Poor quality products:
Another important problem is growth of rural
entrepreneurship is the inferior quality of products
produced due to lack of availability of standard tools and
other equipments as well as poor quality of raw materials.
17. Some of the major human resource problems found in
organization are as follows:
a. Low skill level of workers:
Most of the
entrepreneurs working in rural areas
are unable to find workers with high
skills. In this case turnover rates are
also high. They have to be provided
with on the job training and their
training too generally is a serious
problem for entrepreneur as they are
mostly uneducated and the training
should be imparted in local language
which they can understand easily.
The Industries in rural areas are not
only established just to take
advantage of the cheap labour but
also to bring about an integrated rural
development.
Rural entrepreneurs
should not look at rural area as their
market; instead they should see the
challenges existing in urban areas
and also be prepared for them. Rural
entrepreneurs are generally believed
to be less innovative in their thinking.
Youths in rural areas have very little
options and they are made to believe
this. This is the reason as to why
many of the youths either prefer to
work at farm or else migrate to urban
areas.
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18. b. Negative attitude:
Sometimes environment in the family, society and
support system is not much conducive enough to encourage rural
people to take up entrepreneurship as a career. It may be certainly due
to lack of awareness and knowledge of entrepreneurial opportunities.
Young and mostly well educated youths mostly tend to leave. As per
circumstances, rural people by force may be more self-sufficient and
capable when compared with their urban counterparts, but the culture of
entrepreneurship tends to be weak. Continous motivation is needed in
case of rural employee whom is sometimes very much difficult for an
entrepreneur to impart with.
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20. a. Creation of finance cells:
Banks and financial
institutions which provide finances to
entrepreneurs must create special cells
for providing easy finance to rural
entrepreneurs.
b. Concessional rates of Interest:
On easy repayment
basis and at concessional rates of
interest the rural entrepreneurs should be
provided finances. The cumbersome
formalities should necessarily be avoided
in sanctioning the loans to rural
entrepreneurs
Different organizations like IFCI, SIDBI, ICICI, NABARD etc are trying to sort the
major problems faced by rural entrepreneurs. Marketing problems are mainly
related with pricing, distribution channels, product promotion etc. In order to make
the rural entrepreneurs to state the business venture, following measures may be
adopted:
c. Offering training facilities:
Training is essential for the
overall development of entrepreneurships. It
also enables the rural entrepreneurs to
undertake the venture successfully as it
certainly imparts required skills to run the
enterprise. At present the economically
weaker entrepreneurs of the society are
necessarily offered such training facility by
government of India regarding skill
development of the existing entrepreneurs
so that rural entrepreneurs can indeed
generate income as well as employment
opportunities in rural area especially in north
east and south India region
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21. d. Power supply of raw materials:
Rural entrepreneurs should be surely ensured of proper supply
of scare raw materials on a priority basis. Subsidy may also be offered
at times to make the products manufactured by rural entrepreneurs
reasonable and cost competitive.
e. Setting up marketing co-operatives:
Proper assistance and encouragement should be provided
to rural entrepreneurs for setting up marketing co-operatives. These
co-operatives shall help in getting various inputs at reasonable rate
and they are helpful in selling their products at remuneration prices.
Thus comprehensive training, proper education, setting up of separate
financial Institutions, development of marketing co-operatives to a
large extent help to flourish the rural entrepreneurs in India.
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